10th of November 2021

Joint ownership

Published by Sarah Bufton

How you hold your property as joint owners may not be the first thing that you consider when you a buying a new house. Whilst everything is going smoothly, it is rarely a consideration but, should that change, it becomes very important, especially if one owner passes away or the owners separate.

 As co-owners, you can hold the property in one of two ways:

  • As joint tenants.
  • As tenants in common.

If you hold the property as joint tenants, both of you will own the whole of the property. You will not each have a quantified share in the property and will not be able to leave a share of the property in your will.

If you sell the property, or if you separate, it will be presumed that you both own the property equally, regardless of your respective contributions to the purchase price. On the death of one co-owner, their interest in the property would automatically pass to the remaining co-owner without any further action. This is known as the "right of survivorship".

However, there may be reasons not to become joint tenants. For example, if one of you has made a larger contribution to the purchase price of the property and you would want this to be recognised if the property is sold or if you separate or if you have a family from an earlier marriage and wish to leave your interest in the property to them, instead of passing it to the other co-owner.

The other option is to hold the property as tenants in common, each of you will own a specified share in the property. You need to consider whether each person's share will be fixed from the outset or whether the shares will vary according to the financial contributions made by each person during your ownership of the property.

In coming to your decision, you should think about the following:

  • If you opt for fixed shares, your shares may be equal, but they do not have to be. Holding the property as tenants in common in unequal shares may be desirable if you have made unequal contributions to the purchase price of the property.
  • If you hold as tenants in common, your share of the property can be passed on to another person, either during your lifetime or under your will. If you do not have a will at the time of your death then your share will pass in accordance with the rules of intestacy. Holding the property as tenants in common may be appropriate if you have children from previous relationships and would prefer them to inherit your interest on your death rather than your co-owner.

As you can appreciate, this is an important and complicated area of law and you should look to take advice whether you are looking to buy a property or already own one.